After the critical disaster that was X-Men Destiny, things were looking pretty bleak for developer Silicon Knights. However, a recent report by Kotaku — based on interviews with former staff members — reveals just how bad things have become. The studio is believed to have less than five employees, including company president Denis Dyack himself.

The sources quoted in Kotaku's investigation have stated that during the development of X-Men Destiny for Activision, Dyack had 40 percent of the company's staff (around 45 people at the time) working on a sequel to the 2002 GameCube title Eternal Darkness - a project which would ultimately lead nowhere:

"SK didn't take the development of [X-Men Destiny] seriously the entire time I was there," a source says. "They were working on an Eternal Darkness 2 demo that they could take to publishers. While I was there, they were even siphoning off staff from my [XMD] team to work on it." Sources allege that many of SK's programmers, artists and designers were not contributing to the final quality of XMD at all — at least, not in the first year of the game's development. "I was always complaining to the producers about this, as the numbers never worked out," the same source says. "Denis is not an X-Men fan either, so he didn't care much for the license. To him, it seemed more like a job to get us by, until ED2 could be developed and sold to a publisher — which never happened."

Silicon Knights' fall from grace has been dramatic. Before X-Men Destiny, the studio's most recent release was Xbox 360 exclusive Too Human, which tanked with both critics and consumers following a long development period. A costly lawsuit with Epic Games (which Silicon Knights eventually lost) has also been in the headlines lately.

Interestingly, another source claims that the rot began after Silicon Knights and Nintendo parted ways - an event which occurred following the release of the GameCube port of Metal Gear Solid: The Twin Snakes.

Nintendo's influence — is it alleged — had an effect on the output of the company, forcing Silicon Knights to create better titles that it perhaps would have done on its own. "Nintendo was going to put their name on the game, so it had to be 'Nintendo quality," claims the source. "Once [Nintendo] were out of the picture, SK could do whatever they wanted. Denis believed that SK was finally out from under the oppressive nature of Nintendo as a publisher. Once Denis was given more freedom, things started to fall apart."

How do you feel knowing that Eternal Darkness 2 was actually in development, but is now unlikely to see the light of day? Are you sad to see this once-great studio reduced to just five people, or is Dyack simply getting what he deserves? Let us know in the comments section.

Damien has over a decade of professional writing experience under his belt, as well as a repulsively hairy belly. Rumours that he turned down a role in The Hobbit to work on Nintendo Life are, to the best of our knowledge, completely and utterly unfounded.